The Latest on Southeast Asia: April 1, 2021
April 1, 2021
As Myanmar’s junta leader Min Aung Hlaing celebrated Armed Forces Day with a parade and drone portrait of himself in the capital Naypyidaw on Saturday, soldiers and police across the country killed at least 114 civilians, including children as young as 5 years old. March 27 marked the bloodiest day yet since the general took power in a February 1 coup against the country’s democratically elected government, and the official death toll has now surpassed 500.
On Sunday, President Joe Biden called the killings “absolutely outrageous” and indicated that a renewed pressure campaign would be forthcoming. On Monday, U.S. Trade Representative (USTR) Katherine Tai announced that the United States was suspending all trade activity with Burma under the 2013 Trade and Investment Framework Agreement “until the return of a democratically elected government.”
This action by USTR is the latest in the United States’ increasing economic pressure campaign against the military regime. On March 25, the Treasury Department sharply escalated sanctions against the junta, designating in their entirety both the Myanmar Economic Corporation (MEC) and the Myanmar Economic Holdings Limited (MEHL), two giant military-owned conglomerates whose over 100 subsidiary firms fund Myanmar’s armed forces. These firms touch many sectors of the economy, including trade, natural resources, alcohol, cigarettes, food, consumer goods, clothing, telecommunications, and tourism. Treasury stated in a press release that its goal is to specifically target the military’s control of significant segments of the economy, not the people of Myanmar.
Myanmar’s economy is already reeling due to a convergence of crises. The Covid-19 pandemic has brought with it various travel and business restrictions over the past year and dried up the country’s nascent tourism industry. The United Nations warned in November that the pandemic could cause the number of children living in poverty in Myanmar to increase by 2 million. On March 26, the World Bank reversed its earlier prediction of a strong rebound for the Myanmar economy in 2021. It is instead projecting a 10 percent contraction amid nationwide turmoil following the coup.
The civil disobedience movement, which has seen government functions across the country shut down as civil servants and other essential workers have gone on strike, has also brought to a halt international trade and the country’s banking system. As ports have closed and imports have ground to a halt, fuel prices have risen by over 15 percent nationally and food prices have risen at varying, double-digit rates around the country. Importers who were already experiencing elevated shipping costs due to Covid-19 are now forced to pay even higher rates due to lack of staff at the ports to unload containers in a timely manner. Meanwhile, exporters are having trouble getting paid as Myanmar’s banking system lacks automation and requires staff—who are currently on strike—to approve payouts. The junta’s threat to semi-nationalize private banks has also caused demand for cash to skyrocket, even as ATMs have halved withdrawal limits to $350 per day and the government has restricted corporate account withdrawals to $14,000 per week. This has left many working citizens without pay since February.
Most Myanmar citizens support the civil disobedience movement in some form and want the military out of government. But the military is unlikely to give up power unless serious internal factions emerge. The combination of external and internal pressure via international sanctions, the domestic civil disobedience movement, and renewed fighting with ethnic armed organizations on multiple fronts is putting the military in a bind. But the armed forces have shown no indications yet of a breakdown in cohesion. Until and unless that happens, violence against citizens will escalate and the economy will continue to deteriorate.
And for updates on the region’s ongoing struggle with the pandemic, visit our online Tracker.
